Line-by-Line Instructions (continued)
Page 12
53708-8906 before the end of the taxable year for which the use of
Line 16. Enter the total Wisconsin and total company property.
separate accounting is desired.
Divide the Wisconsin property by the total company property and
enter the percentage.
A partnership that uses separate accounting must complete a schedule
similar to Form 4C showing the income attributable to Wisconsin.
Line 17. Enter, for Wisconsin and the total company, the com-
Form 4C may be obtained from any Department of Revenue office.
pensation paid to the company’s own employes for the performance
of personal services. The compensation must be related to the
Line-by-Line Instructions for Form 4B
production of apportionable income. Compensation related to the
operation, maintenance, protection, or supervision of property used
Line 1. Enter all profits and losses from disposals of nonbusi-
in the production of both apportionable and nonapportionable
ness tangible property in the appropriate column or columns. Such
income or losses must be prorated, and only the portion related to
profits and losses are nonapportionable and follow the situs of the
the production of apportionable income is included for Wisconsin
property.
and the total company. Compensation includes wages, salaries,
commissions, and any other form of remuneration paid to em-
Line 2. Enter rents and royalties received on nonbusiness tangi-
ployes.
ble property in the appropriate column or columns. These are
nonapportionable and follow the situs of the property.
Compensation is paid in Wisconsin (included in the numerator of the
payroll factor) if —
Line 3. Enter any expenses that are directly or indirectly related
to rents and royalties reported on line 2. Since such income is
• The individual’s service is performed entirely in Wisconsin.
nonapportionable, the related expenses are nonapportionable.
• The individual’s service is performed in and outside Wisconsin,
Line 5. Enter the total net nonapportionable income or loss for
but the service performed outside Wisconsin is incidental to the
both Wisconsin and the total company.
individual’s service in Wisconsin.
Lines 6 through 13. Enter the undepreciated original cost of
• A portion of the service is performed in Wisconsin and the base
tangible property owned and used in producing apportionable
of operations of the individual is in Wisconsin.
income at the beginning and at the end of the taxable year. Group
• A portion of the service is performed in Wisconsin and, if there is
the property into the general categories listed for both Wisconsin
no base of operations, the place from which the individual’s serv-
and the total company.
ice is directed or controlled is in Wisconsin.
Don’t include construction in progress, idle property, or property used
• A portion of the service is performed in Wisconsin and neither the
in producing nonapportionable income. Such property isn’t used in
base of operations of the individual nor the place from which the
the production of apportionable income and, therefore, isn’t includ-
service is directed or controlled is in any state in which some part
able in the property factor.
of the service is performed, but the individual’s residence is in
Wisconsin.
Note: If any major acquisitions or dispositions occurred within the
taxable year, the average monthly balances of property may be used
• The individual is neither a resident of nor performs services in
(or required by the department) instead of the average of the begin-
Wisconsin but is directed or controlled from an office in Wiscon-
ning and ending balance. In this case, attach a separate schedule
sin and returns to Wisconsin periodically for business purposes
showing the calculation rather than completing lines 6 through 13.
and the state in which the individual resides doesn’t have jurisdic-
tion to impose franchise or income taxes on the employer.
Line 14. Add lines 13a and 13b for Wisconsin property and for
total company property, and divide each of these totals by 2. This
An individual is considered to be performing a service in Wisconsin
is the average owned property for Wisconsin and the total company.
during the year if that individual spends any portion of at least 5 days
during the partnership’s taxable year in Wisconsin performing serv-
Line 15. Multiply the net annual rental for property used in the
ices.
production of apportionable income by 8 and enter the result. “Net
annual rental” is the annual rental paid less any annual rental re-
Line 18. Enter management or service fees paid to a related
ceived from subrentals unless this results in a negative or clearly
corporation for the performance of personal services. The fees must
inaccurate valuation. Net annual rental doesn’t include incidental
be related to the production of apportionable income. Payments
day-to-day expenses such as hotel or motel accommodations, daily
made to independent contractors aren’t includable.
rentals of autos, or royalties based on extraction of natural re-
sources.
Line 19. Enter the total Wisconsin and total company payroll.
Divide the Wisconsin payroll by the total company payroll and
If the taxable year covers a period of less than 12 months, the net rent
enter the percentage.
paid for the short period must be annualized. However, if the rental
term is for less than 12 months, the rent must be adjusted accordingly.
Lines 20 through 25. For purposes of the sales factor, sales
include, but aren’t limited to, the following items related to the
Leases are given the same treatment in computing the property factor
production of business income:
as they are in computing net income. Leases that have been capital-
ized in computing net income are included as property owned and
• Gross receipts from the sale of inventory.
used for property factor purposes. All other lease payments are in-
• Gross receipts from the operation of farms, mines, and quarries.
cluded in the rentals times 8 computation.
• Gross receipts from the sale of scrap or by-products.